AUD/USD has climbed to 0.7224, its highest level since mid-May, as a fresh record in copper prices lifts the commodity-linked Australian dollar. The pair is testing a swing area between 0.7221 and 0.7228 that has influenced price since April, with the rising 100-hour and 200-hour moving averages defining the downside risk.
Buyers test the next technical ceiling
AUD/USD has reached 0.7224, pushing the pair into a swing area between 0.7221 and 0.7228 that has influenced price since April. That zone marks the next test for buyers.
Getting above 0.7228 is the first step, but staying above it matters just as much. A brief break followed by a quick reversal would suggest buyers could not hold control, while a sustained move above the area would shift focus toward the May high at 0.72769.
Copper strength provides the fundamental tailwind
Rising commodity prices, including a new record high in copper today, are helping extend the advance. Australia is a major exporter of iron ore, coal and liquefied natural gas, and one of the world's leading copper producers, so the Australian dollar is often viewed as a commodity currency.
When commodity prices rise, Australia's export revenues and terms of trade can improve. That does not guarantee the Australian dollar will strengthen, but it can provide a fundamental tailwind, and today that tailwind is helping AUD/USD extend to its highest level since the middle of May.
A longer-term double top looms above
The May high at 0.72769 nearly matched the May 2022 high at 0.72823, creating a longer-term double-top area between those two levels. Sellers may use the zone to establish positions, while buyers who entered lower may take profits, but a double top is only resistance until it breaks.
If AUD/USD can move above 0.72823 and remain there, the failed ceiling could become a catalyst for additional upside momentum and open the door to higher levels.
Moving averages define the short-term risk
The closest risk-defining levels are the rising 100-hour moving average at 0.7183 and 200-hour moving average at 0.71787. Those averages were tested on Friday after a stronger-than-expected US jobs report pushed AUD/USD lower, but the pair found buyers against that support and rebounded.
As long as AUD/USD holds above the rising 100-hour and 200-hour moving averages, buyers remain in control. A move below the 100-hour average would be the first warning sign, though it would take a sustained break below both averages to shift the short-term bias back toward sellers.
Source: InvestingLive
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